New Year’s Resolution: Build Credit

Five tips for improving your credit

Monitoring your credit report and credit rating is important, especially if you’re considering a large purchase or looking to lease. Here are five tips for improving your credit. It’s not about quick fixes, but responsible financial activity over time.

Get a credit card: OK, this may seem counterintuitive, but let me explain. When used correctly, a credit card can be an effective tool for building credit. Charge a few budget-conscious purchases each month, and pay the balance off before your due date.

Keep your balance low: This is the other side of the coin with credit cards. Try to only charge for items you could pay for out-of-pocket, and try to stick to a balance of only 10 percent of your credit limit.

Fix credit errors: You’re entitled to free credit reports each year, so take advantage and review your report for any possible errors, such as incorrect limits or closed accounts.

Leave paid debts on your report: Paid off debts like car loans show that you have a history of paying your debt on time.

Ask! If you’re looking to pay off a debt quickly, it can’t hurt to ask the lender to lower your interest rate. You can’t get what you don’t ask for!